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Illegal logging disallowance - passed by the senate

Thursday, February 8, 2018

I rise to speak on this disallowance motion moved by me and by Senators Brown and Hinch. The Greens do not see amending these regulations of the Illegal Logging Prohibition Amendment as justified, and we have concerns that they weaken the provisions that we have in place. We have those provisions in place for a very good reason: to tackle the major global issue of illegally logged timbers circulating in the marketplace. Australia must maintain high standards in order to play our part. It is not okay for us to squib on our responsibility to address the scourge of illegally logged wood products. The environmental costs, not to mention the social and the economic costs, are too high.

I want to start by setting the scene as to why this is important. The work that has been done in recent years by this government and the previous government has made it clear that illegal logging is still a huge issue in forests around the world. It is estimated that almost 10 per cent of the timber being imported into Australia may have come from wood sources and forests that have been illegally logged. This is huge. Almost one piece in 10 of every piece of timber being imported is likely to have been illegally logged—which almost certainly involved trashing forests that are critical for animals and birds, destroying forests that should be kept to soak up carbon, destroying forests that would otherwise be providing clean water, and, in many cases, destroying forests that are home to and provide the livelihoods for indigenous peoples around the world. Just in our region, illegal logging in Papua New Guinea, West Papua and Indonesia is still a very significant issue, destroying the lives of people and forests and the animals that live in these forests.

There was a 2013 report of logging in PNG by the non-government organisation Global Witness, which looked at logging occurring in their special agricultural and business leases, which they found was the source for around one in every 10 tropical logs entering the Chinese market. Global Witness concluded that most logging in these special agricultural business leases had violated laws designed to protect land rights for Indigenous people. And time after time, according to the report, villagers denied that they had given permission for their land to be included in the leases.

There is not only the impact of illegal logging on communities around the world but there is another reason right here at home why we need to tackle overseas illegal logging—that is, because timber and paper from this illegal logging undercuts our own wood products industry at home. We shouldn't be in a situation where timber and paper that is coming from well-managed Australian plantations has to compete with artificially cheap forest and livelihood-destroying illegally logged timber. But here we have this government wanting to water down the regulations that have been established to ensure the best chance of reducing illegally logged timber coming into the country.

The change appears to be motivated by an overall ideology from this government of reducing red tape. It was back in 2014 that the environment minister, Mr Frydenberg, in his then role as Parliamentary Secretary to the Prime Minister, kicked off this push to deregulate our framework to address illegally logged products. Of course, we have seen many spheres where this government has hacked away at sensible, robust regulatory frameworks in the guise of cutting red tape. But in doing so, in this instance, we risk becoming a global dumping ground for illegally logged timbers, weakening the overall global framework. Driven by this agenda, the government kicked off a regulatory impact statement process to review the regulations aiming at finding ways to reduce unnecessary costs from the framework and that was then put in place to ensure due diligence was exercised by importers of timber products. This regulatory impact statement process examined six options to try and carve out savings and then recommended two of them.

The statement came out in October last year and it proposed to streamline the processes for businesses, subject to the regulations, but undertaking the regulatory amendments we are discussing today. What is being proposed via this regulation change is to allow importers and domestic processors to use third-party timber specification frameworks to assess the risk associated with a regulated timber product, specifically the FSC and PFC certifications, the Forest Stewardship Council and the program for the endorsement of forest certification. This change will create a new deemed-to-comply arrangement for products that are certified under FSC or PEFSC. So any products imported that have either of those figures will be automatically deemed to be okay to be imported and not linked to illegal logging activities and, in doing so, will remove the due diligence requirement which is in place in order to make sure that there is a robust examination of the supply chains for imported timber products.

But, as Greens, we don't support this is a good change because it is not justified when compared to its impact on the global and domestic timber trade. In taking this position, the Greens recognise the important role that certification schemes play in the timber and wood products markets and, as the most robust and credible certification, FSC certification in particular is a really important scheme that signals to importers and consumers that the product they are buying comes from well-managed sources.

Globally, FSC sets the bar very high for ecologically and socially responsible forest management. It is worth noting for reference that there is no logging of native forests on public land in Australia that meets the FSC certification standards. FSC recognises that logging that is putting animals and birds like Leadbeater's possums and swift parrots in Australia at risk of extinction doesn't meet their standards. I am going to talk more about this when we come to general business later this afternoon.

PEFC, on the other hand, is an industry-led certification scheme that's got much weaker standards, and it's been criticised for being a tick-box exercise that excludes social and environmental experts from its processes. There are a lot of complexities when it comes to talking about forest certification standards, but primarily I do want to make this distinction between FSC and PEFC. I also want to note that both standards, to different degrees, have come under scrutiny over time. For this reason, we need to maintain a safety net of a due diligence process for any importers sourcing timber products certified under these schemes.

The government gives two justifications for weakening the regulations. The first is the cost imposition on Australian timber importers. The second is that being certified under either FSC or PESC effectively means all of the due diligence has already been done, so requiring extra work to be done is just doubling up. I'll deal with each of these justifications separately; firstly, the cost imposition on Australian timber importers. The government claims that this change would save the industry $4.2 million annually, but that is a tiny proportion of the overall value of the industry. The government's own regulatory impact statement tells us that we have an $8 billion timber import industry in Australia and, as I've already noted, a risk of up to nine per cent of the timber imported being illegally logged. Yet the government's own regulatory impact statement notes that keeping the status quo of continuing to require due diligence had an average compliance cost per importer of around $1,500 a year, and that it took about 23 hours each year to undertake that due diligence for each importer. So, to meet the current due diligence requirements, we're talking about a cost, as a percentage of the total value of regulated imports, of 0.0037 per cent, based on 2015 import values. And the regulatory impact statement tells us that these figures are potentially overstating the costs. The impact statement says:

… these estimates may overstate the overall cost of compliance for importers. In practice, a sizable number of product lines, once their initial due diligence process has been completed and they have been determined to be low risk, are likely to require only minimal intervention by an importer.

This is the government's own regulatory impact statement. So, in the context of this industry, we cannot see that this very, very small cost burden, when spread across all the businesses in the industry, is significant enough to warrant the risks of removing a safety net that guards against illegal products entering our market.

The government's second justification is essentially that the due diligence has been done with FSC- and PEFC-certified wood products, so it's just doubling up. Firstly, it's worth noting that this would be a novel approach from Australia in a global environment where other countries are facing the same issues. It was highlighted in several submissions to the regulatory impact statement process that neither the European Union nor the United States formally recognises third-party certification systems as a means of ensuring timber legality, although notably both do allow them to be used as part of a system of due diligence or due care. So, if we loosen our requirements in comparison to those markets, we're going to risk becoming a dumping ground for illegally logged timbers.

The reason that the US and the EU don't accept these certification schemes is that these certification schemes are not fail-safe. There have been two recently publicised examples of the failure of these schemes. One was illegal logging in Romania. Despite the products being sourced by an Austrian company with FSC chain-of-custody certificates, FSC took a long time to revoke the certificates and rectify the situation, despite being presented with the evidence of illegal logging. There is also a current example in Peru, where one of Peru's largest exporters was blocked from US exports under their prohibition despite having two valid FSC certificates.

A month later, the US government banned all imports from this company because they found massive amounts of illegal timber in their shipment. So if we had changed our regulations now, that company would be free to send all of that timber to Australia instead under the new deemed-to-comply provision. That's two examples of where the FSC certification has failed.

The FSC is extremely robust compared to the PEFC. Many PEFC schemes have much lower standards and hardly any independent controls. I certainly don't think that, overall, PEFC certification is worth the paper that the certificates are printed on. The Australian version of PEFC is the Australian Forestry Standard, which certifies as legal and attempts to greenwash clear-fell logging in Australia, which has been challenged time and time again in the courts and been found to not be legal. You only need to look at the court successes of Environment East Gippsland over illegal rainforest logging and logging which is destroying the habitats of threatened species and the lack of proper surveys in previously unlogged forests—such as in the Kuark forests of East Gippsland—to see that PEFC certification, even based on the Australian version of it here, cannot reliably be used for due diligence.

The other thing to bear in mind with certification and whether it's good enough for due diligence is that where you've got strong certification, such as FSC certification, it actually makes the required due diligence much easier. Where there is a robust certification scheme with robust chains of custody, then it is actually easy to check the certificates. It will streamline and considerably reduce the cost of undertaking due diligence. If a company is importing FSC-certified timber, the cost of that due diligence, I'm sure, will be far, far less than what was estimated in the regulation impact statement.

As such, I expect that maintaining due diligence, even on certified products, will in fact encourage the use and the import of FSC-certified timber as opposed to PEFC-certified timber and, indeed, uncertified timber. That is a good thing. If supporting and reinforcing the Forest Stewardship Council brand then flows on to increasing the use of Australian FSC-certified timber, which is almost all sustainable plantation-sourced timber in Australia, then that will be an absolutely welcome bonus of maintaining these regulations as they stand.

I want to conclude by emphasising that our role in these global supply chains is crucial. Illegal logging is a global problem, and Australia must do its bit to uphold a robust framework to address it. The Greens cannot see any good reason to allow these regulation changes to be implemented. For this reason, we have co-sponsored this disallowance motion, and we are seeking the Senate's support for the maintenance of a sensible and robust approach to keep illegally logged timber out of the Australian market.